Globally acclaimed Danish conglomerate, Maersk, has been planning to sell its energy business to the French integrated oil and gas company, Total SA. Through this deal, Maersk will receive approximately USD 7.5 billion for the entire sale from Total. This transaction has been touted to be one of the biggest acquisitions by the French oil giant since 1999. Under the terms dictated by the agreement, Maersk is likely to receive USD 4.95 billion in the shares of Total, while the latter will acquire USD 2.5 billion from Maersk Oil’s debt.
Total’s takeover of Maersk energy business is a part of the oil giant’s strategy to exemplify its portfolio and subsequently strengthen its position in oil and gas market. Total’s CEO, Patrick Pouyanne, has been quoted stating that this transaction is likely to prove beneficial for Total in terms of cash flows, which may unquestionably boost the organization’s growth over the years ahead.
Earlier, the French giant had expanded its regional presence across Brazil and Uganda, which proves to be an additional advantage for this agreement, as Maersk Oil owns several assets in the North Sea. Experts claim that Total’s decision to purchase Maersk Oil is certain to provide a competitive edge to the oil behemoth in the global market.
Through this strategic break-up, the Danish conglomerate seems to have procured a better price than expected. Post the sale, Maersk plans to focus on logistics, ports, and container shipping. The firm also aims to return a “material portion” of the USD 5 billion received from Total, back in the company’s shares to its investors by means of share buyback or share distribution.
Maersk’s CEO has been on roll since his appointment, now, with the sale of the energy business, and recently, with the purchase of Hamburg Süd for USD 4 billion, which one of the major container shipping groups in the world. This is a sure-shot indication of the fact that Maersk has been undertaking efforts to upscale its logistics and shipping sectors.
Considering the fluctuating oil and gas prices, oil giants have been engaging in major deals since the last few years, to garner appreciable returns. For instance, in 2015 Royal Dutch Shell invested USD 52 billion in the acquisition of BG group, post which, the company has been witnessing a positive profitability landscape. BP has also recently sold its assets to Chinese Petrochemical for USD 1.7 billion, which indicates that the number of energy deals are likely to increase in the coming years.
Sunil develops content for Market Size Forecasters. A Post graduate mechanical design engineer by qualification, he worked as an intern at the defense lab for one year in the engine design and development department before switching his professional genre. Following his technical writing skills, he ...